My heart goes out to you. I'm in a similar situation. I have a collection agency (ACS) suing me on a loan made 25 years ago which became uninsured (no longer federally guaranteed) 10 years ago. So the statute of limitations should apply as in the case of private student loans. It seems most attorneys have little to no knowlege about the details of the student loan industry. So rather than paying an attorney to help save me $10,000, I'm hiring a law student to do the Lexus Nexus research to see if there are any other precidents that will prove my case. If you're interested you can post these kinds of jobs at university law schools via the web. I had 10 responses within 3 hours. I know this posting is 3 years after your original, but I felt compelled to send it anyway. Perhaps it will help others as well,
Mike

When dealing with lenders, guarantors, ED, and collection agencies, it's best to focus on facts, and not emotions.

Record phone calls (even if they aren't legally admissible evidence, it gives you records).

Keep copies of all correspondence, documents, etc.

You have the right to your accounting and payment history, copy of original promissory note, etc.

You need to have a basic understanding of how payments are applied, how interest accrues, under what circumstances interest can be capitalized, etc... statements, your promissory notes, the common manual, and HEA itself can provide you with a lot of that information.

Your loan holder is not "above the law", although they can be very good at making you think they are. Knowledge of the laws and how student loan holders generally interpret them will give you power. Ignorance is not bliss.

Helpful resources:

http://nslds.ed.gov (see your student loans, history, status, etc.)

http://www.ed.gov/policy/highered/leg/hea98/HR6.pdf (The Higher Education Act)

http://www.edfund.org/pdfs/ICM0307.pdf (Common Manual...how the lenders and guarantors interpret the HEA, common policies, etc.)

In 1982 I got a texas guaranteed loan, I had a GED & scored high on the test the technical school gave us so they said I could also recieved a grant. there were 6 semeaters;1st 2 were tv studio & then 4 electronic technition. we had a great teacher & we crammed 6wks into 4 so we would have 8wks for the 2nd electronics semester because it was the most vital in this field. At the beginning of the 2nd electronic semester & having 2 extra wks, the good teacher left(don't know why) but the new teacher(HA!!)was not even in class enough to teach us anything, so we wrote a letter to the school. They said we were just lazy & didn't want to learn. we lost all that time;we has spent so-much time & money at this point, that none of us knew what to do,but 3 quit.Finally one of the upper management guys at the school tryed to back track all we had missed & the teacher for the last semester tryed to teach us the stuff for last semester (all in the last semester) but it was just to much. I had $30.00 a month for food,hygene,ect. for 2 people,dug in the furniture hopping to find change to get bread at the dayold bread store & walked to get it; my size 1 pants just hug on me; I just could not go on living like that.I had perfect attendance certificates for about 22wks, was the only female & in the top 3 in my class. I didn't know who to cantact either but When I got my 1st letter for repayment I wrote a letter back & (I still have it), I made copies & sent them to: texas & chicago board of education, wacovia,& the texas Guarantor about no training, ect.I never heard from them again so I thought they had settelled it with the school, after 20yrs my employer got a letter from an attorney to garnish my wages.They said it started at 4,000.00 but is 13,000.00 now & earning $30.00 a month intrest. It is so aparent that there was not an investigation because a blind man could have seen it & all the other classes could have verifyed the truth, why were they not contacted? Why was I not contacted for questioning, my last name was the same for 10 yrs, I filed taxes every yr, & my parents lived at the same place. I did get a job at a tv station in Nowhere USA but my brother-in-law had to let me go because they needed someone with the techinical part as-well.Yes I was fired & someone else with technical training that I was supose to have gotten but did not was hired in my place.I'm 38,Single mom of a 6yr old & work in a School,in an extremely low-income District & state,take care of disabled friend who hasn't been able to get disability. I was nearly killed by drunk driver. I have back, neck, arm & knee problems. When I took my child to get counceling because of the divorce, the councelor saw how stressed I was trying to make ends meet, the threat of wage garnishment, ECT., that he sent me to one.I was cheated out of an education, time, money & a good job by the gov.dept.over education; it wasn't there fault for what the school did but it was there fault that they did not investigate & set the record straight 20yrs ago.I have written them all again, plus a senator, 2 govoners one said that they don't like to get involved(do they think we like not getting a timely investigation & updated on what they have done so we could have resolved this yrs ago)& free legal will not do anything either they just said there is a file but it is closed & the school closed in about 1994 I believe.they stopped last year but are at it again. Those are our tax dollars paying their wages & our tax dollars going out in loans & grants. Is there a statue of limitation or anything on any of this.

I knew I was deep in crap by 1990...I have been to lawyers, accountants, senator, congress....it feels so alone out there....this is new hope here folks....I get a bit renewed. Been there done that on the despair....pretty bad. Hang in there for now this is a growing paradigm/ growing group of enough people to fight back...I am counting on all of you....this has been one long f'ing nightmare

I also cannot find any lawyers to take this on. I think this is because the battle is with city hall, and you know what the old saying is.

In my case, and I'm sure in other cases, the Dept of Ed and a private lender have actually done some illegal maneuvering and they must be fairly sure that they are safe from litigation.

The situation worries me as well, but I am at the point that I am going to send the Dept a certified letter that I have paid back the principal and then some, and then declare all other liens against me illegal.

After that they can only take 10% of my income (they've been getting a fourth and then slapped me with an illegal "collection charge" because of a few missed payments- how's that for "working things out"?) and they can't take my house and my car.

Like many Americans we will die in debt, but I know I do more good in one day as an instructor at a community college than any of the pencil-pushing morons who collect debts do in an entire lifetime. I guess we'll just have to live for our ideals and battle the ignorant and avaricious the best we can. However, a class action lawsuit would also do just fine.

Literally millions of people can relate to your circumstance, and yet nothing has been done. Why can't you find a lawyer to give you legal advice? Because the probability of achieving a successful outcome is so remote. Federal bankruptcy laws are stacked against you, offering virtually no hope of discharging your debt. Student loan lenders are unwilling to negotiate resolutions regarding federally guaranteed student loans because the federal government will assume responsibility for the loan and pay off the lender if the borrower defaults and is unable to resolve the default. Congress and the U.S. Department of Education have established and continue to maintain a student loan system that serves the interests of private industry at the expense of student loan borrowers, resulting in the gross unfairness you and so many other borrowers have experienced.

Your situation is a prime example of why we believe the most effective strategy will be a class action lawsuit on behalf of student loan borrowers. Your post suggests harm related to the capitalization of interest. What specific types problems have you experienced in communicating with the government? Has your credit rating been harmed? Any additional harms you could tell us about will be helpful.